YEREVAN, May 30. /ARKA/. The International Monetary Fund (IMF) expects that the 12-month inflation in Armenia will be within the confidence band of 4%±1.5 pp, as projected by the Central Bank, IMF Resident Representative in Armenia, Guillermo Tolosa, said in an exclusive interview with ARKA news agency.

"The macroeconomic situation in Armenia is sound. Inflation is low, economic growth is gathering pace, the budget deficit was substantially reduced, the public debt is manageable and the banking system is steady," he said.

However, he said Armenia could achieve higher growth rates.

"Based on current projections of potential growth, Armenia will be able to reach the level of Hungary in 75 years and the level of the Czech Republic in more than 100 years," he explained, adding that the neighbouring Georgia will need half of this time.

Tolosa also pointed to the importance of ensuring adequate and equitable approach to business initiatives.

"When the government will substantially improve the character of its relationship with economic entities, this applies first of all to the State Revenue Committee, that will have a significant impact on economic growth," he said.

Saying that Armenians are known for their entrepreneurial spirit, Mr. Tolosa said the country has a Diaspora with huge financial and human potential, ready to step up investment here. Besides Armenia has the opportunity to conduct free trade with the EU and some former Soviet republics.
"The country is ready for the next step, but, unfortunately, the obstacles that exist today suggest that a set of commendable efforts have not yet brought about particularly impressive economic results," he said.

The government of Armenia expects the GDP to expand this year 4.2%. -0-